Crime and Punishment, Part II

Justice is A Matter of Restitution, Not Punishment or Correction

We have argued that the modern Athenian system of justice is anything but systematic. It is riddled with inconsistencies, non sequiturs, blind alleys, irrationality, and--well, to be blunt--stupidity. One fundamental cause of this is that society remains confused over what the purpose is of the prison system. Modern western societies, including New Zealand, cannot decide whether prisons are for punishment, rehabilitation, correction, penitence, or for protection of the community. The best that our hopelessly confused systems of justice can come up with is "all of the above" which results in a completely confused mess of programmes and policies in the courts and in the prison "system" (one hesitates to employ a term which implies order and structure.)

We have also argued that prisons are our modern form of institutionalised slavery. Whilst none dare call it that--the word is unmentionable in polite society--nevertheless the entire prison system is nothing more than a form of slavery, where right of ownership of an individual is asserted by the State. But there is one profound difference between our modern form of slavery and that found in every other culture and time: our slaves do not work! They are kept as slaves, but forbidden to work. This makes it abundantly clear that the modern prison system had to have been invented by the Irish.

For Jerusalem, that Christian City, when it comes to crime and punishment there is one predominant objective which should override all others, and to which all other objectives should be subordinate: victims of crime should be restituted by the criminal. That is the fundamental debt criminals owe. Everything else should be bent toward achieving this end. If there are to be prisons, they should exist to offer those imprisoned a structured opportunity to restitute those whom they have harmed. On this principle, the prison is an institution enabling disciplined, structured restitution of victims (not punishment, correction, penitence, rehabilitation of criminals, or whatever else might be the flavour of the month.)

Ironically, (and not surprisingly, given the perverted nature of Unbelief) restitution of victims is the one objective overlooked completely in the sentencing of criminals in our pagan justice system. Yes, we know that from time to time the State has bursts of enthusiasm about the idea, but it remains little more than an optional extra to the modern criminology. Yet, if it were properly instituted into our system of punishment it would make a whole lot more sense. Moreover, it would make the whole modern system of crime and punishment more overtly and intrinsically a system of justice. It would do this because it would institutionalise the principle of the criminal being required to put right those whom he has wronged.

In order for this to work properly, however, and result in a thorough reform and rehabilitation of the prison system there are some crucial aspects which must be part of the package—without which, the whole construct would collapse into yet another incarceration failure. We cannot emphasize this enough. There is little to be gained (and much to be lost) if restitution were to be added as one more objective of prison administration. This would only add one more confusion to bedlam.

Any reform, in order to be reform, must only be undertaken if it reorganises the entire prison and justice system around this one dominant objective: restitution of victims. This means society must relinquish its desire for vengeance, or its pretensions about redemption, correction, or rehabilitation. These are nothing more than humanistic idolatries where man is vainly asserting the prerogatives of the Living God.

Let us trace out how this might work, in the courts and in the prisons.

First and most important is the principle that the debt a criminal owes is not to society at large, but to his victims—to those he has harmed and hurt by his actions. (The idea that the debt is to society at large is just another manifestation of socialism asserting the communal, that is state ownership of everything.) According to the Christian view of justice in this world, if a criminal adequately restitutes his victims the State has no further claims upon him, and continuing enslavement in a prison is unjust.

To highlight this principle, consider the following case. A thief steals a car and writes it off. In the process he smashes into another car and hospitalises an innocent. At court, the judge orders restitution to be made to the owners of the two cars. The criminal must provide funds to purchase replacement vehicles, plus additional compensation for hurt, inconvenience, and the imposition of having to go without a car. In addition, the judge orders that an appropriate lump sum be paid over to the hospitalised victim to cover all medical expenses, plus additional funds to compensate for loss of earnings, hurt to the family, ongoing medical costs, any temporary or permanent impairment, etc. (The calculation of monetary compensation for hurt suffered has a long and honoured tradition in western jurisprudence. It also is a fundamental construct in biblical justice.)

Let us estimate that the total restitution ordered by the court would amount to $350,000. In addition, the criminal would be charged from time and attendance by the police, together with court costs. It turns out, however, that the thief has a wealthy uncle who agrees to pay over the restitution money. The thief agrees to accept the payment of his obligation, and the funds are duly paid over to the victims. At that point, the State has no further interest in or claim upon the criminal (apart from the police and court costs, which would be part of the restitution debt). The debt has been paid. Justice has been done.

But, we hear you say, the criminal has paid no price. He has not been punished. Possibly. But the victims have been restituted and that is the predominant, if not the only, interest which the State has in the matter. Further retribution to the thief belongs to God, not to human courts.

Now, we should not imagine that the thief is off scot free. In the ordinary patterns of human social interaction, we would expect that in most cases the family, led by the generous uncle, will demand a great deal of the thief in return.

This leads us to the second vital principle: where a relative or person of interest offers to restitute victims on behalf of a criminal, the criminal must be formally indicted as being in debt to his benefactor or kinsman-redeemer. The State must recognize that the kinsman-redeemer has a property right in his relative or the one he has redeemed, until the debt is paid off or back. This debt would be able to be cancelled at any time at the discretion of the kinsman-redeemer up to a period of so many years, nominated by the benefactor. After that time, the debt would be automatically canceled. These terms and conditions would be negotiated and agreed to by both the kinsman-redeemer and the redeemed—and would subsequently be recorded and ratified by the Court. Prior to that time, the kinsman redeemer, at any time, could demand payment of the debt. If the criminal were unable to pay the amount outstanding, the State would pay the remainder to the kinsman-redeemer, and the thief would be sent, or recalled, to prison until the balance outstanding were paid to the State.

This model of penology would result in large numbers of people being kept out of the prison system in the first place. This in itself would have a significant benefit. Everybody knows that the current prison system apparently succeeds in just one thing: it is one of the most sophisticated and powerful schools of crime and criminality ever devised by man. People who do stupid and thoughtless acts in their youth are often transformed into career criminals though their first experiences in the modern pagan prison system. Our approach would provide the opportunity to avoid prison altogether.

The third principle is that if a criminal were unable to pay restitution, and no-one was prepared to act as kinsman-redeemer, the State would pay over the restitution to the victims and consign the criminal to prison until he has worked off his restitution debt. Only then would the criminal be viewed as having a debt to society at large, since his restitution money would have been paid by society at large. There would be no fixed term or judicial term to the prison sentence. The criminal would stay in prison as long as it took to pay back the debt. If he failed to pay back the debt, he would never get out of prison--thus, effectively being consigned to prison for the term of his natural life.

Fourthly, it follows that prisons must be places of work where prisoners can earn income to pay off their restitution debts. This would remove the folly of having slaves who are not allowed to work. As we have said there would be no fixed term of sentence. The term would be set by however long it takes to pay back the restitution debt. (Generally, the more serious the crime, the longer it would take to pay it back because the amount of restitution would be greater. Therefore the period of incarceration for serious crimes would likely be longer. White collar criminals, with large numbers of victims, might never emerge from prison.) Kinsman-redeemers, or private benefactors, would be able to pay all or part of the amount outstanding at any time, to assist with the shortening or ending of the term of slavery (that is, working while in prison.) This would have the collateral benefit of enabling a wider family to contribute to the welfare of the prisoner in the most practical of ways and at the same time giving the family a significant incentive to do all they can to ensure that the prisoner would not re-offend.

Fifthly, there would be no compulsion within the prison system to work. Forcing people to work against their will only results in work that is unproductive and of a low standard. It also necessitates extensive and constant supervision. Rather, a fixed charge should be added to the restitution debt roughly equivalent to the costs incurred in keeping a criminal in prison. We are told that it costs roughly $70,000 per annum to keep a person incarcerated. This amount should be added to the restitution debt annually for a prisoner who refuses to work. Moreover, non-working prisoners would lose privileges, being kept in close confinement. The only way to regain the ordinary prison privileges would be to volunteer to work, make application for an available job, and be accepted. Once employed, they would immediately come out of close confinement. Some would continue to refuse and would thereby consign themselves to a life time of incarceration. So be it.

Sixthly, if a prisoner elected to work, we suggest that up to half his earnings would be deducted from his income to pay for his “board and expenses”, up to a certain maximum amount which would be the annual cost of keeping a prisoner incarcerated. The remainder would be applied to his outstanding restitution account. Thus, if a prisoner were earning more than $140,000 per annum in prison, he would never be charged more than $70,000 per annum for “board and expenses.” As an incentive, for the time a prisoner elected to work, and therefore for the time payments were being made out of his earnings to his “board and expenses” account, nothing more would be charged to him for his incarceration costs, even though fifty percent of his income might be far less than the actual cost of his keep.

We would expect that the prisoner would pay income tax on his earnings. This would be an indirect method of compensating the State for inflation eroding the value of the original restitution bond. It would also remove any distortions between a criminal working to pay of his restitution debt privately, as opposed to prison facilitated payment. It would also avoid the fundamental trap of giving prison enterprises an advantage over their competitors.

Seventh—and this is vital—the work done in prisons must be at real enterprises, doing real jobs, producing commercial goods and services, by businesses operating at and for profit in the open market place—and the prisoners must be paid at commercial market employment rates. The present system operating in prisons is self-defeating and stupid. Privileged prisoners can go on work schemes (often in the community): they are paid “pocket money” wages and have little or no financial incentive. Meanwhile private businesses find that their enterprises and firms are undercut and outcompeted by those firms employing cheap prison labour. It is a completely unsustainable and self-defeating model. It reflects the screwed up thinking of modern penology.

The overwhelming objective of current work schemes in prisons is rehabilitation (teaching work skills, meaningful activity, to enable prisoners to function into society). Because the focus is not on paying restitution debt, the incentive of working to earn so as to get ahead is removed, thereby removing most of the benefit of work in the first place.

Why else ought prisons exist? Every other purported objective set forth for prisons to accomplish they have miserably failed at--and the Western world has around three hundred years of experience at this now. We are such slow learners. Or maybe ignorance is invincible when it is blinded by humanist ideology.

But what about the argument that prisons at least protect the rest of the community by locking malefactors up and away? It turns out that this principle is also fundamentally unjust and cannot be used as a principle of just punishment. We will take this up in our next piece.

Crime and Punishment, Part I

The Splenetic Subject of Prisons

Prisons, crime and punishment are the current topics du jour. Firstly, we have the brouhaha over privately run prisons. For some it appears that the profit motive is sufficiently nasty and tacky that the idea that a business could make money from running a prison is distasteful. This criticism reminds one of the attitude amongst the upper classes of the Georgian period where they looked down their noses at people who were earning their keep through business enterprise. Being “in trade” was a snobbish insult. Trade! How disgusting.

Worse is the emotive corollary—that someone could actually make money from someone else's suffering (that is, criminals being punished) is beyond distaste. It gets very close to trafficking in human beings—that is, to a re-emergence of slavery. As soon as the "s" word comes in to play, emotions can run high.

Since criticism such as these are sufficiently extreme to have difficulty in gaining public traction, opponents of privately run prisons are forced to retreat to arguments about the relative cost versus benefits of private prisons compared to state run prisons. So the debate, complete with specious and deceptive use of data masquerading as "facts", has been going on now for some weeks. However, those who take the negative position are being embarrassed almost daily as the failings of the NZ Corrections Department and the shambolic and squalid state of our prisons comes to light. People are starting to think pragmatically on this issue: surely privately run prisons couldn't be worse than our current mess, could they?

Of course there are those who take the high moral ground (philosophically speaking). They want to advance the idea that punishing criminals is a role that ought to be exclusively reserved for the State. No-one else can or should undertake that duty. This neatly skirts the debates over profit or not, good outcomes or not, well run prisons or not. However such philosophical arguments fail dismally in that there is no underlying ground or principle on which they can be founded. In the end, the question is always begged, “Who says punishment of crime belongs exclusively to the State?” The absolute notion of the State solely being entitled to punish criminals has no place in the modern relativistic pagan world where “man is the measure of all things, and nothing human is foreign to me.”

One of the main reasons modern society is so pathetic and fails so dismally in its penology is the fundamental and perpetual confusion over what should be done with criminals. The modern penal system is (at the same time) a regime of punishment, of rehabilitation, of correction, of reconditioning and retraining, of penitence, and of protection for the rest of society. These objectives are so diverse, so disparate and so contradictory that they constantly war against each other. This explains why such confusion exists over prisons and the prison system—and why none are satisfied with it.

No-one thinks that our modern prison system is working well. And given its mutually contradictory objectives, no-one ever will. The “punisher” complains about prisons being too soft, not sufficiently harsh, sentences being too short, and parole too readily granted. The “rehabilitator” complains about high recidivism rates, arguing that people are left in gaol's too long and are unable to re-adjust to life outside—and so on. This is why the prison system and what to “do” with criminals remains a political football—no-one has answers that can hope to meet all the contradictory objectives which our pagan society regards as equally important.

What is needed is a solid, overwhelmingly believed, principal objective of imprisonment, grounded in essential principles of justice—which must be pursued and achieved above all else. Other benefits which might accrue or result would then be collateral outcomes, but not objectives and not the point of prison. Only then will we be able to have a coherent prison system.

So, what might Jerusalem contribute to this issue? In the first place, we are going to lay aside the question of whether there ought to be prisons at all. There are Christian philosophers or thinkers who question the rectitude and wisdom of the prison system or model per se. We are going to assume that we will have prisons for some time, and that, for better or worse, they are here to stay at least for the foreseeable future.

But we do wish to insist on one point which it turns out will be crucial to any coherent approach. We must acknowledge—all parties must acknowledge—that prisons are slave camps. No, seriously. Quell the rising bile for a moment. Whatever else they are, whatever else they might be or do, prisons are inescapably and indisputably institutions of slavery. “Official” slavery to be sure, but slavery nonetheless.

Now this principle is repugnant to the modern world. Never use the “s” word. Whatever name we might give to prisons (penitentiary, correctional institution, custodial block, maximum security facilities) no-one can bring themselves to call them by their proper name. All of the names above are euphemisms. All the current names avoid the reality. Prisons remain inescapably places of enslavement—to which people are committed against their will, in which they lose their freedom, and to which they are bound. Yup, sounds pretty much like slavery.

A slave is a person who has had control over his own life and body taken away, by force. We use the term “body” deliberately, for no-one on earth can finally control the mind and spirit of another human being without chemicals. But involuntary control of one's body—how one spends one's time, uses one's labour—is what it means to be enslaved. This is what it means to be owned by another.

After all, the prison is not a voluntary institution. The State takes the criminal by force and commits him to prison against his will and for the time of his sentence controls the physical behaviour of the inmate. He is told when to rise, when to sleep, how to spend his time, what to eat, with whom to associate, etc. He is owned by the State. In principle there is no difference whatsoever with prisoners in former times being committed to slave galleys, being chained to oars, and required to row on command.

But, having said that, there is one outstanding difference: modern prisons consist of slaves who do not work. That's right. Never in the history of human race have we ever seen such a bizarre version of slavery as what the stupidity of man has brought forth in the institution of the modern prison. Convicted criminals are enslaved in every aspect, except being required to work.

To summarise, the prison system is the institution thought up by modern humanist ideology to deal with (or to) criminals. But there is no consensus or agreement on what being "dealt" with means; therefore, there is no settled societal view on what prisons are to achieve or accomplish. There is only a pot pourri of conflicting objectives--so conflicting in fact that each undermines the other. The result is confusion and mess.

The bottom line is, however, that the prison system represents the modern manifestation of slavery, which has always been part of human societies. In our modern world, criminals are enslaved, yet with a bizarre variant: for the first time in human history we have seen a civilisation embrace legally sanctioned slavery, yet not require the slaves to work. Go figure.

Of course the modern prison system did not used to be that way. For over a century, to be imprisoned in many cases meant being sentenced to hard labour. This was much more consistent with being enslaved. However, it became very clear over time that the system was failing. Firstly, there was the school of thought which argued that hard prison labour should be a form of punishment. Thus, conditions were deliberately kept very difficult. Prisoners were brutalised. Work was largely meaningless (for example, carrying large stones from one end of a yard to the other, repeatedly, day after day). Society could not sustain policies of deliberate cruelty and inhumanity to other human beings. Moreover as time passed it became very clear that such such "hard labour" brutalized and dehumanised people: they started to act according to the way they were treated.

Then, secondly, the work approach changed to one of seeking to give prisoners meaningful employment, teaching them trades and skills which they could learn on the outside. This turned the prison into more of a reformatory, less a penitentiary. The focus was less on punishment, more on rehabilitation. But this, too, could not be sustained. The economics of the model were deeply flawed. Prison work failed to keep pace with industrial and technological development. But even in its heydey, prison commerce undermined competitor private sector businesses; inefficiency became rife; feather bedding and poor quality, the norm. The model devolved fairly quickly back into meaningless labour.

So, prison slaves were no longer required to work, which is where we are today.
So, the question becomes, what is the appropriate activity for modern society's incarcerated slaves? In order to answer that question we need to return to the issue of what the principal objective of the imprisonment or enslavement of a criminal ought to be.

At this juncture Jerusalem parts ways with Athens. Jerusalem is fundamentally concerned with justice. Athens is far more concerned with retribution, at one extreme, and rehabilitation, on the other. Neither pole is intrinsically connected to or related to justice itself. This is why in New Zealand the Department of Justice is responsible for the court system; the prisons are run by the Department of Corrections. The institution of the prison and prison policies are not grounded in, nor related to justice.

We can well understand why modern pagan society has a problem with the concept of justice. In the humanist frame, where man is the ultimate reality and nothing human is foreign, that which is seen as evil can have no higher or deeper warrant than current public prejudice or preference. Moreover, distinguishing coherently between what is evil and what should be regarded as a crime is impossible. While all crimes are by definition evil, not all evils are crimes. Pagan man has no reference point to make the distinction. Modern society can rise no higher than "it is bad because we say so." Therefore, it is completely understandable that modern pagan society would downplay or ignore justice as a fundamental driver of the prison institution and prison policy. In the modern world, justice is a completely relative and plastic notion. It is only a connotation, a feeling, a hunch, a popular opinion.

But Jerusalem is different. For Jerusalem, justice is meaningful and has definitive denotation because the Living God alone is the Judge. Judgement belongs to Him. Vengeance against evil belongs to Him. Not all evils are punished in this life. Justice in this life is very important, but is limited, prescribed, and proscribed. Justice within Jerusalem is focused far more upon the victim than the criminal, because vengeance and just retribution belong to God and His jealous actions, not to man. God's justice will not be finally revealed or executed until that final Day--but none will escape His assizes. Every thought, word, and deed of every human being will be judged with infallible knowledge and terrible retribution against evil on that Day.

Therefore, in this life and prior to that Day, ensuring that the criminal gets his just desserts is not a fundamental driver of the administration of justice. But ensuring that the criminal is made to restitute those he has harmed is a proper and approriate focus and emphasis of justice in this life. If the victim is not restituted, justice has not been done. This is justice within Jerusalem.

So, now we come to the most important and fundamental question with respect to the prison system: how does the modern prison system facilitate and achieve criminals restituting victims of their crime? It simply does not. Therefore, we conclude that the modern humanist prison system is not just fundamentally flawed in a pragmatic sense, but it is prfoundly unjust. To that extent it is a wicked and evil system.

Might it be reformed into a system of justice? Yes, we believe so. Our next post will endeavour to describe how just prisons would work in a more Christian world.

Pride Goes Before a Fall

The Forgotten Discipline of Market Forces

Carbon emissions trading schemes are the flavour of the month. Well, they have been up until the cold light of economic reality started to bite. It would be a wonderfully kind divine providence if the current economic correction were to have the side effect of shutting up New Zealand's planned carbon emissions trading scheme up in a cold dark room and throwing the key into Mount Doom.

Cap and trade systems have worked remarkably well, we are told, in some sectors. Fishing is one. Effectively, the government (using research data and advice from its scientific experts) sets a limit upon the tonnage that can be caught. The limit is set at a level to ensure the species sustainability. Effectively this is a supply control on the market. Then the state sells the right to catch up to that amount per year. It is called a quota. Effectively this is a tax on the industry.

The fishing companies are then free to buy and sell quota at a market set price--which ensures that the fishing industry is effectively freed from government control to compete and generate the efficiencies which always flow from competition, without destroying the fisheries.

Of course there have been a few minor hiccoughs along the way, such as allegations of falsifying catch records, stand over tactics against competitors to drive them out of business and take over their quota entitlements, and so forth--but this is a policing issue. It is not an intrinsic failure of the system itself.

The success of cap and trade in industries like fishing is one of the reasons why everyone got so excited about using a cap and trade system to control carbon dioxide emissions. They all forgot one minor point. Fish are a scarce resource. Every fish taken out of the ocean diminishes the resource, until replaced by natural generation. The fishing quota system is designed to limit the taking of the resource so that it will always have sufficient stock to reproduce and maintain itself. Carbon dioxide, on the other hand, is not a scarce or diminishing resource. Every breathing animal, including all human beings, emit carbon dioxide. Virtually all human activity, including all economic activity, emits carbon dioxide. Therefore, the market price for carbon dioxide is always going to trend down towards nil. Anything above zero is an artificial price. The only way to avoid this paradox is to have less living beings on the planet. Fewer human beings would likely result in lower carbon emissions.

The "market" in carbon emissions will always tend to have an oversupply of carbon credits. The more humans engineer their commercial activities to reduce carbon emissions, the more credits are created. To compare back to the fishing quota analogy, it would be akin to a situation where the government kept issuing fishing quota, until it became virtually worthless. If the price of carbon credits is falling, it becomes relatively inexpensive for big carbon emitters elsewhere to buy up quota and belch out lots of carbon dioxide into the atmosphere.

Europe has been really gung ho on introducing a carbon emissions trading scheme. Spiegel Online recently exposed the complete failure of the system to date. It shows up how carbon dioxide trading systems are doomed to abject failure.

Wind Turbines in Europe Do Nothing for Emissions-Reduction Goals

By Anselm Waldermann

Despite Europe's boom in solar and wind energy, CO2 emissions haven't been reduced by even a single gram. Now, even the Green Party is taking a new look at the issue -- as shown in e-mails obtained by SPIEGEL ONLINE.

Germany's renewable energy companies are a tremendous success story. Roughly 15 percent of the country's electricity comes from solar, wind or biomass facilities, almost 250,000 jobs have been created and the net worth of the business is €35 billion per year.

But there's a catch: The climate hasn't in fact profited from these developments. As astonishing as it may sound, the new wind turbines and solar cells haven't prohibited the emission of even a single gram of CO2.

Under current EU law, German wind turbines aren't helping to reduce CO2 emissions. They simply allow Eastern European countries to pollute more.

Even more surprising, the European Union's own climate change policies, touted as the most progressive in the world, are to blame. The EU-wide emissions trading system determines the total amount of CO2 that can be emitted by power companies and industries. And this amount doesn't change -- no matter how many wind turbines are erected.

Experts have known about this situation for some time, but it still isn't widely known to the public. Even Germany's government officials mention it only under their breath. No one wants to discuss the political ramifications.

It's a sensitive subject: Germany is recognized worldwide as a leader in all things related to renewable energy. The environmental energy sector doesn't want this image to be tarnished. Under no circumstances does Berlin want the Renewable Energy Law (EEG) -- which mandates the prices at which energy companies have to buy green power -- to fall into disrepute.

At the same time, big energy companies have an interest in maintaining the status quo. As a result, no one is pushing for change. Everyone involved is remaining silent.

Not an Instrument against Climate Change

In truth, however, even the Green Party has recognized the problem, as evidenced by an e-mail exchange last year between party energy experts and obtained by SPIEGEL ONLINE. One wrote the following message to a colleague: "Dear Daniel, sorry, but the EEG won't do anything for the climate anyway." Ever since the introduction of the emissions trading system, the Renewable Energy Law had become "an instrument of structural change, but not an instrument to combat climate change."

That means: wind turbines and solar energy plants are revolutionizing Germany's mix of power sources, creating jobs and making the country more independent from imports. But they aren't helping in the fight against climate change.

In the worst case scenario, sustainable energy plants might even have a detrimental effect on the climate. As more wind turbines go online, coal plants will be able to reduce their output. This in itself is desirable -- but the problem is that the total number of available CO2 emission certificates remains the same. In other words, there will suddenly be more certificates per kilowatt of coal energy. That means the price per ton of CO2 emitted will fall.

That is exactly what happened in recent trading. A certificate to emit a ton of CO2 cost almost nothing. As a result, there was very little incentive for big energy companies to invest in climate friendly technologies.

On the contrary. Germany was able to sell unused certificates across Europe -- to coal companies in countries like Poland or Slovakia, for example. Thanks to Germany's wind turbines, these companies were then able to emit more greenhouse gases than originally planned. Given the often lower efficiency of Eastern European power plants, this is anything but environmentally beneficial.

This phenomenon is especially apparent whenever the sustainable energy industry grows more quickly than anticipated -- as in recent years when growth in the renewable energy branch quickly rendered the EU Commission's CO2 plans obsolete.

Building Renovations Are Better than Windmills

Experts from the Green Party are taking the problem very seriously: "We are in a veritable crisis situation, and that means we must reconsider and alter things we once took for granted," writes one contributor, adding that it's important to re-examine "whether we have set the right priorities."

Another expert begins his e-mail with a general clarification: "Dear People, I'm not fundamentally against the EEG. I only emphasize this because Manfred has repeatedly and erroneously described me as an opponent of the EEG." But here comes the big "but": "When reduction of CO2 emissions is more cheaply achieved through insulating a building than using a wind turbine, that is where we should concentrate our support." When it comes to climate change, everything else is secondary to reducing CO2 emissions.

Indeed, when it comes to climage change, investments in wind and solar energy are not very efficient. Preventing one ton of CO2 emissions requires a relatively large amount of money. Other measures, especially building renovations, cost much less -- and have the same effect.

The e-mail exchange ends with a conciliatory "What do you think?" But it is quickly followed by a bitter PS: "Do the Greens think that this problem (of climate change) will solve itself if we just screw solar panels onto our rooftops?"

Environmental Groups Admit to the Problem

The German Renewable Energy Federation is clearly not thrilled about the debate. The lobbying group's official line is: "By implementing renewable energy, there will by a reduction in 2008 of 120 million tons of CO2." When pressed, however, representatives of the federation will admit that this only applies to Germany. But the reality is that the freely traded CO2 certificates can be sold and used abroad.

Likewise, one federation employee openly said that there is "a certain degree of inconsistency" between the EEG and emissions trading.

But does it really have to be like this? Is it really so impossible to reconcile both of these instruments for protecting the climate?

In theoretical terms, of course it's possible. To do so, however, currently existing laws designed to prevent CO2 emissions would have to be reconciled. In real terms, for example, that means that every time a new wind turbine is built, the state would be forced to take certificates off the market. It is only in this way that you can achieve real positive effects on the climate.

Politicians Buckle to Business

There were discussions about such a system under Chancellor Gerhard Schröder, who governed in a coalition with the Green Party. At the time, Minister of the Environment Jürgen Tritten wanted to exclude the amounts of energy covered by the EEG from the calculations used in the carbon-trading scheme. Instead, the industry-friendly regulations currently in effect were pushed through. Major energy corporations, which had claimed as many CO2 certificates as they possibly could, lobbied heavily.

So why has nothing changed? According to experts, one reason has to do with technical problems. In the course of an ongoing trading period, they claim, adjusting the volume of CO2 certificates is no easy task.

Still, an SPD insider provides yet another explanation: "Politicians just have to resign themselves to certain things." As he sees it, if the state went back to the companies and took away the certificates they had been allotted, the result would be an uproar. "What do you think the companies would say to us?" he asks. "As a politician, there are certain storms that you simply can't weather."

So, the unintended consequences of Emissions Trading Schemes--at least according the European experience--is that they end up increasing carbon dioxide emissions. Well, we can hear you say, that is easily solved. Governments should reduce the amount of carbon credits available as more and more "green" energy becomes available. But if you reduce the amount of credits, you remove the so-called incentive not to emit carbon dioxide. It becomes self-negating.

The biggest flaw and error in carbon trading mania is the assumption that carbon dioxide is a pollutant. It is not. It is as life giving and necessary as oxygen. Might as well impose a cap and trade system for oxygen. Yes, let's do that. If we are going to be asinine and stupid, might as well go the whole nine yards.

Meditation on the Text of the Week

One Fit to Be Our Judge

Therefore having overlooked the times of ignorance, God is now declaring to all men that all everywhere should repent, because He has fixed a day in which He will judge the world in righteousness through a Man whom He has appointed, having furnished proof to all men by raising Him from the dead.
Acts 17: 30—31

This text represents Paul's concluding remarks to the crowd gathered on Mars Hill at the Areopagus in Athens. He could not go any further because they cut him off at that point, not prepared to listen any longer. Jerusalem had clashed with Athens. The Greek crowd had taken great offence at Paul's declaration that they were going to face as their judge One whom God had raised from the dead.

The Greeks, of course, had a prevailing religion—held in common with a great deal of mankind today—that this world, particularly its physical and material aspects, imprisoned and limited men. Upon death, the soul of man was understood to be liberated to move to new dimensions where it would achieve a truer and higher state of being. Thus the idea that they, and all of mankind, would face a Judge who was a material and physical being was deeply offensive. It was as if a mature adult were to be eternally judged by a just born child. It was as if weakness were to judge strength. If filth were to judge purity.

To the Greek the sins in the flesh and the body were nonsense for the body and the material world were intrinsically inadequate; sins of human nature were an oxymoron—a contradiction in terms.

So they concluded that Paul was proclaiming monstrous, notorious rubbish, unable to be borne any longer. Of course, if Paul were alive today, and preaching in any public gathering in our cities he would be likewise rejected. For modern man (like the Greek) has chosen not speak of sin, but weakness. All our sins, even our crimes, are but peccadilloes due to insufficient care, or provision, or nurture of our being. This continuity through centuries tells us a great deal about Paul and his Gospel; it also tells us a great deal about man and his unbelieving evil heart.

As we approach the Easter season we again fix our attention upon the death and resurrection of our Lord. For Paul these events were first and foremost to do with God's judgement of mankind. With the coming of our Lord and His climactic passion and resurrection all human history changed. The tectonic plates of human existence altered forever. Human history could now be characterised as “before” and “after”. The Cross stands as the fulcrum point of time and history. As a result of the death and resurrection of our Lord, nothing would ever be the same again.

Paul's “take” on this that fateful day on Mars Hill was that prior to the Cross God was patiently indulgent towards mankind. He overlooked the idolatry and brute stupidity of men because they were living in ignorance. That had been an important constitutive part of human history prior to the Cross. The Gentiles were left alone, as it were. God, while yet providentially controlling all men and nations, rarely, if ever, bothered with them. The Gentiles were on remand, as it were, awaiting the constitution of God's court. His focus was upon His people, Israel. It was in Israel that He has chosen to establish His Name and His presence. And the role of Israel was to bring forth the Judge of all mankind.

But all this changed with the resurrection of our Lord. Now, every Gentile was called. Every Gentile was summoned to judgement. God had fixed a day to judge every man in righteousness. Both the judgement and the Judge had been revealed.

The Cross was (and is) the greatest revelation of judgement the world had ever seen. It was far more terrible and terrifying than the flood of Noah, the exile to Babylon, or the destruction of Jerusalem in AD70—devastating though these judgements were. These were but echoes of the original which was Golgotha. In the Cross, God's hatred of sin and His wrath against it was shown in a way never before or since seen. He would rather punish and execrate His own beloved Son, Whom He loved, and in Whom He delighted, than accept or tolerate the sin of His people. There was no escape. There was no mitigation. There was no indulgence. No tolerance. There was no “other way” for which Messiah pleaded in the Garden.

If there was to be an atonement and a mercy seat and a covering, if there was to be forgiveness, the sin of His elect still had to be punished and His wrath and vengeance against all that is wicked in their lives must needs be satisfied. If that satisfaction could only come through execrating and cursing His only begotten Son, then so be it. And so it was.

That event changed human history forever. Now all men had seen the holy hatred of the Living God against all their sin. It had been revealed to them as never before nor since. It was as if an accused murderer were sitting in court awaiting trial, while witnessing the trial and execution of his confederate before him, knowing the fate that awaited him. Therefore God no longer left the Gentiles unattended or not confronted. If Christ had been appointed by God as the only Name by which man could be saved, then any who deliberately continued in unbelief and rebellion against their Creator knew for sure what awaited them. The judgement to come had already been revealed. The terms and procedures of the court had been made evident. The Judge had been appointed. The day had been fixed.

The resurrection of our Lord established final and certain proof that He alone, although He had borne the full wrath of God against sin, was the holy and pure and accepted One. The Lord raised Him up—making Him the Man who would judge all men. He had borne and experienced God's hatred of sin and its punishment. He had borne it as one pure and without sin. He was therefore raised up again. He alone is fit to be our Judge—He who is both our peer in His humanity and yet peerless in His innocence and holiness. There will be no excuses before Him.

Every man every where, every people and every nation must now repent and turn to Him as their Saviour and thankfully accept His blood atonement for their sin, or they would face Him as their Judge. Before Him, there can be no excuse or mitigation.

The Roar of Chainsaws

An Apocalyptic Nightmare

Apparently there are caverns and bat caves beneath the civilised streets where lurk a feral breed of people. They are poisoned by a hatred of trees. They each have a chainsaw--which is the initiation requirement to be part of this community of primordial slime. Every now and then one of these hideous miscreants will start his murderous machine up, and the caverns will be rocked with the raucous sound of his instrument of death, while his comrades lick their lips and sway ghoulishly in the half-light.

There is excitement in the caves--not seen for years. Word has been received that the ignorant and cruel government is about to remove from local councils--those noble institutions which keep at bay the dark forces of a long banished past--the power to decree vast swathes of territory as "tree protection zones." Like orcs bred in the caverns of Isengard, the tree killers are poised to swarm up and out, ravaging the countryside with their axes and chainsaws, wreaking their savagery upon innocent trees.

"It's clearly a return to the Dark Ages," said Anita Oak, Tree Protection Officer for the Upper Hutt Council. "In a more primitive era white colonists came to this country and cut down native trees and bush everywhere. And why? Yes there is the shame of it. They wanted to make money. Money! It's going to happen again. Profit ahead of trees."

Rimu Moana, of the Forest and Bird Waitakere branch agreed. "It's a sad, sad day," she said. "Under the current regime--so enlightened, long may Helen live--local councils could just decree large areas as tree protection zones and people could not cut down trees in those areas. It has been wonderful. It works. Now it is going to be terrible. Councils will have to identify each single tree as worthy of protection. The costs will be prohibitive. It's just not going to work."

The North Shore City environmental policy and planning manager Raupo Reid said that huge numbers of trees will no longer have legal protection. "Imagine that," he said. "How could it have come to this? The human rights--err, excuse me, the arborial rights of trees are being trampled upon."

None of these watchmen on the walls of civilisation wished to talk about their darkest fears. When pressed they acknowledged that they had heard of the anti-tree, chainsaw mad, cavern dwellers. Some visibly shivered when we raised the issue. Others were more indignant. "Look," said Nobby Totara of the Action Valley Coalition and who had personally chained himself over fifty times to trees to try to protect them, "we know they are out . . . I mean, down there. It's worse in the cities because they can congregate underground and feed their feral instincts starting up their chainsaws and all. They are far worse than Boy Racers and gangs--let me tell you that! They are going to emerge like cockroaches and cut down whole valleys of lovely trees as soon as this law passes. Then the government will be sorry."

But Mr Totara is arguing that this will simply be a call to arms for all tree lovers everywhere. "We will fight those bastards in the forests, and on the beaches. We will never surrender. And should our land last for a thousand years, they will say, this--this--was their finest hour." We left him puffing contentedly on a cuban cigar.

Tree Council chairwoman, Silvio Birch said that the change in the law would mean a whole lot more work. Councils were going to be inundated with requests to protect individual trees. Environmental lawyer, Janette Cypress, who represented the Tree Council in court cases protecting trees, said that it was going to be prohibitively expensive for councils to list each individual significant tree.

But an entirely different picture was given by the General Manager of Christchurch City Council, John Maple. "Look, there's a bright side to all of this. More council work, more money, more committees, more field officers, more submissions, more lawyers. Submissions and hearings for every single tree in the city! It's great for local government. I have always said that bureaucracy was recession proof."

When it was pointed out to him that some trees might be cut down, he shrugged and said that it was important for everyone to keep an eye on the greater good, and a few trees dropped as collateral damage was a price well worth paying if it kept council staff and environmental lawyers in a job.

Slow Learners

The Liberal Ideologues Cannot Help Themselves

The Proverb says, "A hundred blows on the back of a fool makes no impression; but a word to the wise is sufficient."

We and many others have written on how welfare-rights-entitlement ideologies were at root substantially responsible for the banking crisis in the US (and, due to financial disintermediation and securitisation subsequently, a global problem.) The morally bankrupt idea that the poor had an entitlement right to own their own homes led to Congress led policies which forced banks to lower lending standards and grant mortgages to people who had little or no hope of servicing them.

This has resulted in a large number of mortgages being defaulted upon, which has brought great strain to US and international banks. So the US government, marshalling its ability to spend, has loaned billions and billions of dollars to banks to shore up their balance sheets, compensating them for all their mortgage assets which have gone sour. If banks don't have sufficient capital, they cannot continue to lend. Even creditworthy and sound lending opportunities then cannot find capital, leading to a rapid contraction in business in almost every place. So far, so good.

But now, we are told, the welfare-entitlement-rights folk in Congress and the Obama administration have decided to have another crack at forcing banks to engage and continue in bad lending. The basic rationale is the same as that which promulgated the crisis in the first place. It is the belief and assertion that people--especially poor people--are entitled to own a home. Therefore, Congress has decided it is going to tell banks how to do business, if they accepted Federal money. They must keep lending to insolvent, bankrupt, poor people who cannot service the loans which they should never have been given in the first place.

We have heard plenty about executive bonuses, salaries, fat-cat spending etc. etc. Congress has railed against such misuses of government money. So, according to the Herald Tribune, Congress has put rules in place to prohibit such excesses. But it has also began to instruct banks not to foreclose upon and evict people in default of their mortgage commitments.

U.S. financial institutions that are getting government bailout funds have been told to put off evictions and modify mortgages for distressed homeowners. They must let shareholders vote on executive pay packages. They must lower dividends, cancel employee training and morale-boosting exercises, and withdraw job offers to foreign citizens.

As public outrage swells over the rapidly growing cost of bailing out financial institutions, the administration of President Barack Obama and lawmakers are attaching more and more strings to rescue funds. Some experts say the conditions are necessary to prevent Wall Street executives from paying lavish bonuses and buying corporate jets, but others say the conditions go beyond protecting taxpayers and border on social engineering.

Thus, banks are now being forced, once again, to engage and maintain bad credit lending. The result: weak banks are being forced to continue bad lending practices which will have the effect of making them weaker still, leading to more and more bank defaults (or more bank bailouts)over time.

A growing chorus of industry experts is warning that asking weak banks to carry out the government's economic and social policies could increase the drain on the public purse. These experts say that the financial assistance, while helpful in the short run, could require weak banks to engage in lending practices that will lose them even more money, and that the government inevitably will become more heavily involved in dictating how banks do their business.

In other words, government policy is now forcing banks to increase their risks, not reduce them. Risky lending. We thought that Congress and the Obama administration believed that banks excessive risk taking was the cause of the problem. Now they are requiring federally assisted banks to become even more reckless. But, hold on, it's OK, because the poor are having their entitlement rights served. And that has been the cause of the problem all along.

It the fool will not learn, no matter how many adversities are visited upon his hapless head. Rights based ideologues and zealots are fools. They will continue to follow policies that bring devastation and destruction right through the community because they are blinded by their idolatry and ideology. Welcome to Athens!

But it is not all bad. The smart, stronger banks have woken up. They have decided to give the Federal money back.

Some bankers say the conditions have become so onerous that they want to give the bailout money back. The list includes small banks like TCF Financial of Wayzata, Minnesota, and Iberiabank of Lafayette, Louisiana, as well as giants like Goldman Sachs, Wells Fargo and U.S. Bank in San Francisco. They say they plan to return the money as quickly as possible, or as soon as regulators set up a process to accept the repayments.

Wells Fargo has been a very successful bank over a long time. Their decision is significant. These are the institutions which are fundamentally sound and are likely to go from strength to strength in the current environment. What is likely to happen is the bank sector in the US will be split into two: those banks which are sound and which have decided to have nothing to do with the Federal government's blood money; and those which have accepted it and are are becoming weaker by the day as the government forces them to engage in more and more risky commercial behaviour.

The policies of the Congress and Obama administration will probably be judged by history to have been the biggest single cause of the destruction of the banking system in the first decade of this century. But that's what fools do. An ironic development is likely to be that banks which accept federal bailouts will be branded as weak, near insolvent, and to be avoided like the plague. So much for a federal bailout: it will turn out to be a Judas kiss. We recall the sage words of Ronald Reagan: the most terrifying words in the English language are, "I am from the Federal Government and I'm here to help you."

We leave the closing word to one smart banker.

C.R. Cloutier, the president of MidSouth Bank of Lafayette, Louisiana, and a survivor of the savings and loan debacle, said that his institution accepted $20 million from the rescue fund because he and his board believed it was patriotic and would help them offer loans during a recession. But faced with what he says is an unwarranted stigma of participating in the program, as well as the new restrictions that are imposed on banks taking the money, he is now considering whether to return the money, as other institutions have sought to do.

"Two things you learn in the banking business," Cloutier said. "The first is concentration is bad. We now have 64 percent of deposits in eight institutions. The second rule is your first loss is your best loss. Get it over with. Don't pump water in a dead fish."

Indeed. Now there is a wise man for whom a mere word is sufficient.

Ugly Duckling or White Swan

The Glory of Nuclear Energy

There are plenty of people, particularly in New Zealand, who have a visceral fear and loathing of nuclear energy. It is always bad, bad, bad.

The Scriptures, however, tell us that nothing which God has created is intrinsically good or bad in itself. It is the uses to which it is put that make it so. The idea that something in the created world is intrinsically evil is nothing less than a modern manifestation of primitive animism.

We came across a piece recently which should interest anyone who is willing to be objective on the subject of nuclear energy. According to the ABC, there appear to be some truly exciting technological advances arriving on the scene.

Why Old Nuclear Power is Not New
Barry Brook

Previously in this forum I have expressed the view that nuclear power will likely play a key role in the world's future energy mix. My bottom line was this: the climate and energy crises need fixing with extreme urgency, and both require solutions which completely solve their underlying causes. Half measures at best merely help to delay the same eventual result as business-as-usual (and at worst encourage complacency) - saddling future generations with a climatically hostile planet with a scarcity of available energy.

The comments in response to my openness about the nuclear option were not unexpected. In short, five principle objections were mounted against the viability or desirability of nuclear power.

First, uranium supplies are small, such that if the world was wholly powered by nuclear reactors, there would be at most a few decades of energy to use before our resource was exhausted and the power plants would have to shut down. Second, nuclear accidents have happened in the past, and therefore this power-generation technology is inherently dangerous. Third, expansion of nuclear power would axiomatically risk the proliferation of nuclear weapons. Fourth, in taking the short-term nuclear energy option, we would be bequeathing future generations with the legacy of long-lived nuclear waste requiring thousands of years of management. Fifth, large amounts of energy (and possibly greenhouse gases) would be required to mine, mill and enrich uranium, and to construct and later decommission the nuclear power stations themselves.

Cost and embedded energy arguments used against nuclear must be left for another day, because to be addressed fairly, this also requires a critical examination of the costs and embedded energy requirements for the alternative sources (renewables and fossil fuels).

Now all five of the above points have some merit, although their relative importance compared to threat of climate change and the societal disruption caused by critical energy shortages is debatable. The chaos and bitter complaints which stemmed from the power shortages experienced during the current heatwave in southern Australia demonstrate how dependent we are on a secure, reliable energy supply. But to be honest, there is little point in even having a debate on how persuasive these five objections are, because none will be applicable to future nuclear energy generation.

Of the more than 440 commercial nuclear power stations operating worldwide today and supplying 16 per cent of the world's electricity, almost all are thermal spectrum reactors. These use ordinary water to both slow the neutrons which cause uranium atoms to split (fission) and to carry the heat generated in this controlled chain reaction to a steam turbine to generate electricity. Because of the gradual build-up of fission products (nuclear poisons) in fuel rods over time, we end up getting about 1 per cent of the useable energy out of the uranium, and throw the rest out as that problematic long-lived waste.

Modern reactors are incredibly safe, with physics-based 'passive' safety systems requiring no user-operated or mechanical control to shut down the reaction. Indeed, a certification assessment for the 'Generation III+' Economic Simplified Boiling Water Reactor (ESBWR) put the risk of a core meltdown as severe as the one which occurred at Three Mile Island (TMI) in 1979 at once every 29 million years. For reference, the TMI incident resulted in no deaths. Similarly, comparing the inherently unsafe Chernobyl reactor design to an ESBWR is a bit like comparing an army revolver to a water gun.

Did you get that? Apparently the risk of core meltdown is now itself been subject to meltdown.

Fast spectrum reactors, also known as 'Generation IV', are able to use 99.5 per cent of the energy in uranium. There is enough energy in already-mined uranium and stored plutonium from existing stockpiles to supply all the world's power needs for over a century before we even need to mine any more uranium. Once we do start mining again, there is enough energy in proven uranium deposits to supply the entire world for at least 50,000 years. Fast reactors can be used to burn all existing reserves of plutonium and the waste stream of the past and present generation of thermal reactors.

Did you get that? Present uranium stock piles will meet all the world's power needs for over one hundred years. As we have argued before in these pages, access to electric power is one of the essential technologies to enable people to lift themselves out of squalor, disease, and poverty. Supplying the whole world with electric power is now possible and feasible.

And, if proven uranium deposits are mined, there is enough to power the world for fifty millennia!

The safety features of Gen IV designs, due for instance to the metal alloy fuel used, is superior even to the ESBWR. The nuclear fuel used by fast reactors is fiendishly radioactive and contaminated with various heavy elements (which are all eventually burned up in the power generation process!), making it impossible to divert to a nuclear weapons programme without an expensive, heavily shielded off-site reprocessing facility which would be easily detected by inspectors.

Even better. The latest reactors could be deployed around the world without creating a situation of easy access to nuclear weapons capability.

Yet in reality the only nuclear waste material that will ever leave an Integrated Fast Reactor complex (a systems design for power stations which includes on-site reprocessing) are fission products, which decay to background levels of radiation with a few hundred years (not hundreds of millennia), and can be readily stored because they produce so little heat compared to 'conventional' nuclear waste.

For further details, I refer you to my review of the book Prescription for the Planet, which discusses the Integral Fast Reactor technology in-depth, as well as ways to transform our vehicle fleet to use zero-emissions metal-powered burners and how to convert our municipal solid waste to plasma.

So, the nuclear waste problem looks like it will be a thing of the past, as well.

Business-as-usual projections suggest that at current pace, we may have Gen IV fast spectrum reactors delivering commercial power by 2025 to 2030. Too late, you say! True enough, but these same sort of forward projections resulted in the International Energy Agency recently predicting that non-hydro renewables will go from meeting 1per cent, to 2 per cent, of global energy use. Either option therefore requires radically accelerated research, development and deployment, if it is to make a difference to climate change and energy supply. A project of Manhattan-style proportions (America's development of the atom bomb, three years after the first controlled chain reaction) or the audacity of the moon-shot vision (12 years from Sputnik to Neil Armstrong's famous small step), is required.

There is no doubt in my mind that we have the means to 'fix' the climate and energy crises, or at least avert the worst consequences, if we have full recognition of the scale and immediacy of the challenges now faced. New generation nuclear power is one possible path to success, and one that all nations should actively support - though certainly not to the exclusion of other zero-carbon energy options such as renewables and efficiencies. So let's be sure, when rationally considering energy planning, that we are not mired in old-school thinking about exciting new technologies.

The real driver for development of the Gen IV technologies is not the prevention of global warming. That is a fundamental misdirection. The real driver is to provide access to essential electric power to the entire human race, the majority of which remains in poverty and squalor.

Mid-Week Miscellany

They Are Drinking Our Beer Over There

First up this week is the appearance over the weekend of an article on John Key in the Wall Street Journal. Now the prestige and breadth of readership of the Journal is pretty much peerless so this is quite significant.

For those of our readers who have not yet seen the article, we reproduce it in full below.

There are a couple of things which stand out. Firstly, Key's candour in acknowledging the limitations of government. One of the most disgraceful things to become evident recently has been the way politicians, journos, and the chattering classes have all expressed outrage that the government is "not doing more." They mean by this: spending more money in a spectacular way.

There has been a chorus of calls to cancel tax cuts. Why? So the government can have more money to spend on the crisis. What has been on display in recent weeks has been the shameless devotion to the mantra "the government is our god". People have wanted their god to deliver them, to be doing something, to save us.

How refreshing and realistic it is to have the Prime Minister keeping the limitations of government firmly in his mind. In our view he needs to repeat this publicly and often.

Secondly, it is salutary to have the Prime Minister worrying about the burdens of debt.

When we were being pulled back from the brink of economic devastation by the Douglas reforms in the 1980's, New Zealand used to get positive international press regularly. It is possible that we will see that again as New Zealand works its way through the recession and comes out the other side. Certainly at the moment New Zealand is marching to be beat of a very different drummer than the rest of the developed world. We believe in time it will be evident that it was a much better drummer to boot.

You Can't Spend Your Way Out of the Crisis

New Zealand's prime minister wants to give his country a competitive advantage instead.

By MARY KISSEL

Wellington, New Zealand

These days, you have to travel far to find a national leader who is talking about market-based approaches to the global recession. All the way to the other side of the world.

"We don't tell New Zealanders we can stop the global recession, because we can't," says Prime Minister John Key, leaning forward in his armchair at his office in the Beehive, the executive wing of New Zealand's parliament. "What we do tell them is we can use this time to transform the economy to make us stronger so that when the world starts growing again we can be running faster than other countries we compete with."

That idea -- growing a nation out of recession by improving productivity -- puts Mr. Key and his conservative National Party at odds with Washington, Tokyo and Canberra. Those capitals are rolling out billions of dollars in stimulus packages -- with taxpayers' money -- to try to prop up growth. That's "risky," Mr. Key says. "You've saddled future generations with an enormous amount of debt that then they have to repay," he explains. "There is actually a limit to what governments can do."

The 47-year-old Mr. Key, a pragmatist by nature, knows a thing or two about how the public sector works. The youngest of three children, he was raised in state-owned housing in Christchurch, on New Zealand's South Island, after the death of his father. His mother worked at blue-collar jobs to keep the family afloat. Mr. Key earned a bachelor's degree in commerce from the University of Canterbury, took a job the next day at a local accountancy firm, and married his high-school sweetheart. After seeing a TV advertisement about a foreign-exchange trader, he started canvassing banks for a job. That kicked off a career as a foreign-exchange trader, with postings in Singapore, London and Sydney -- most recently at Merrill Lynch. "Bank of America," he says, with not a little mirth, "it's probably soon to be owned by Barack Ob-ah-ma!" -- emphasis on the "ah" in Kiwi-speak. His press secretary rolls her eyes.

Mr. Key's coalition government, which includes parties to the right and left of the Nationals, has moved fast to implement a program of tax cuts, regulatory reform and government retooling. He won't label it supply-side economics and smiles when I ask if he's a Milton Friedman or Friedrich Hayek acolyte. "I'm not deeply ideologically driven," he says. "I believe in good center right politics."

Mr. Key is returning the country to a formula for prosperity that's worked in the past. As in Britain, the U.S. and Australia in the 1980s, New Zealand's government implemented a wide-ranging program of economic liberalization, including deep reductions in tariffs and subsidies, and privatization of state-run industries. The plan, nicknamed "Rogernomics" after then-Finance Minister (now Sir) Roger Douglas, was akin to Reaganomics, and the island nation grew smartly.

But while the U.S. and Australia broadly continued their economic liberalization programs under both right- and left-wing governments, New Zealand didn't -- until now. Over the past nine years, Helen Clark's left-wing Labour government rode the global economic expansion and used the revenue surge to expand government welfare programs, renationalize industries, and embrace causes like global warming. As a result, the economy stagnated while Australia took off.

"We have been on a slippery slope," Mr. Key says, pointing to the country's slide to the bottom half of the Organization for Economic Cooperation and Development's per-capita GDP rankings. "So we need to lift those per-capita wages, and the only way to really do that is through productivity growth driving efficiency in the country." He talks at length about how to attract and retain talented workers. What does he think about populist arguments about the end of capitalism? "Nonsense!"

Mr. Key's program focuses first on personal income tax cuts, which -- given that the new top rate, as of April 1, will be 38% -- are still high, especially when compared to Hong Kong and Singapore. "We just think it's good tax policy to lower and flatten your tax curve," he says. "People will move in labor markets and they look at their after-tax incomes."

Cutting the corporate tax rate -- which is now 30% -- isn't as crucial just now as keeping liquidity flowing, Mr. Key argues. "A lot of [companies] won't pay tax if they don't make money," he reasons. "So they might be slightly less focused on corporate tax in the immediate future. Longer-term, they will be." Why? Corporate money is "mobile." "If you really are out of whack with the prevailing corporate tax rates, and there's been a global shift toward countries lowering their corporate tax rate, then you're not likely to attract capital, or you're likely to lose capital." Mr. Key and his coalition partner, the ACT Party -- Mr. Douglas's party -- want to eventually align personal, trust and company tax rates at 30%.

For now, the prime minister is focusing on chipping away entrenched regulations that drive away foreign capital -- a contrast to the U.S. and Australia, which are reregulating their markets in the wake of the financial crisis. "Good regulatory reform can be an important catalyst toward driving economic growth and coming out of the recession faster," Mr. Key says. His government is revising legislation meant to protect New Zealand's pristine environment from private-sector development but misused by greens to stymie all stripes of business plans.

Big government is also coming under the gun. Mr. Key launched a "line-by-line review" of every government department, and committed the government to cap new spending in its May budget. "If we want to fund new initiatives, we by definition have to stop [funding] some of the things we don't think were working. . . . We're just getting better value for money."

The Key government also is wary of climate change orthodoxy. "Half of all of our emissions come from agriculture," he says, meaning cows "burping and farting." "We don't have an answer to that. . . . So at the moment, we either become more expensive or we cut production. And neither of those options are terribly attractive." Mr. Key is reviewing the economic impact of the previous government's cap-and-trade plan. "New Zealand needs to balance its environmental responsibilities with its economic opportunities, because the risk is that if you don't do that -- and you want to lead the world -- then you might end up getting unintended consequences."

Much of Mr. Key's reform agenda hinges on his belief that he has to prepare his country to compete in the global economy. "The world, whether we like it or not, will become more and more borderless," he says. That means Wellington is planted firmly behind free trade. "The sooner Doha is completed," Mr. Key says, referring to stalled global trade talks, "the better from our point of view."

Mr. Key chuckles when I ask him about the "Buy American" provision tucked into the Obama administration's stimulus package. The previous government's "Buy New Zealand" campaign got a "lukewarm" reception, he recalls. "There are so many component parts manufactured in different parts of the world, you're chasing your tail the whole time about where something's actually made."

New Zealand last year inked a free-trade agreement with China, recently signed a deal with the 10-member Association of Southeast Asian Nations, and announced the start of negotiations with India and South Korea last month. Korea "obviously" wants an FTA with the U.S., he says.

Does New Zealand's model hold lessons for the Obama administration? Mr. Key says that might be "presumptive." But he does outline a few general lessons: "Your citizens are entitled to expect you to be realistic . . . to be specific about what it is you're going to do, what you can or can't do. And finally, I think, to be confident that you can get through it. Now there's plenty of doom and gloom merchants out there. But the single biggest risk is that everyone believes them and stops doing anything. I can't see how that helps us." What did he learn in his former trade? "It taught me not to panic."

Going forward, he worries about, among other things, the U.S. dollar's path. Like most other trading nations, the bulk of New Zealand's exports is denominated in dollars, and the country's private sector borrows heavily from offshore markets. Says Mr. Key: "For anyone trying to manage currency risk, and indeed often interest-rate risk, you know, it's not generally the absolute level, it's more the volatility that becomes the determining factor." A strong and stable dollar policy out of the Obama administration would be helpful.

But ultimately, Mr. Key says his biggest fear is rising inflation on the back of rising money supplies. "Economic theory will tell you that inflation is going to rise -- and that inflation will be exported around the world. . . . In the short term, I'm not criticizing U.S. policy: I think inflation is probably the thing that's going to be necessary to get them out of the current issue. [Federal Reserve Chairman Ben] Bernanke sort of signaled that. But longer term, inflation is cancerous to your economy."

So would Mr. Key, the onetime foreign-exchange trader, buy or sell the U.S. dollar? As we move toward the door, the press secretary steps in: That's one call that's off the record.
Ms. Kissel is editorial page editor of The Wall Street Journal Asia.

Mainstream Media Are Beginning to Ask Questions

Just how cold has been the northern winter? An article in the Boston Globe tells us.

The United States has shivered through an unusually severe winter, with snow falling in such unlikely destinations as New Orleans, Las Vegas, Alabama, and Georgia. On Dec. 25, every Canadian province woke up to a white Christmas, something that hadn't happened in 37 years. Earlier this year, Europe was gripped by such a killing cold wave that trains were shut down in the French Riviera and chimpanzees in the Rome Zoo had to be plied with hot tea. Last week, satellite data showed three of the Great Lakes - Erie, Superior, and Huron - almost completely frozen over. In Washington, D.C., what was supposed to be a massive rally against global warming was upstaged by the heaviest snowfall of the season, which paralyzed the capital.

Meanwhile, the National Snow and Ice Data Center has acknowledged that due to a satellite sensor malfunction, it had been underestimating the extent of Arctic sea ice by 193,000 square miles - an area the size of Spain. In a new study, University of Wisconsin researchers Kyle Swanson and Anastasios Tsonis conclude that global warming could be going into a decades-long remission. The current global cooling "is nothing like anything we've seen since 1950," Swanson told Discovery News. Yes, global cooling: 2008 was the coolest year of the past decade - global temperatures have not exceeded the record high measured in 1998, notwithstanding the carbon-dioxide that human beings continue to pump into the atmosphere.

None of this proves conclusively that a period of planetary cooling is irrevocably underway, or that anthropogenic carbon dioxide emissions are not the main driver of global temperatures, or that concerns about a hotter world are overblown. Individual weather episodes, it always bears repeating, are not the same as broad climate trends.

But considering how much attention would have been lavished on a comparable run of hot weather or on a warming trend that was plainly accelerating, shouldn't the recent cold phenomena and the absence of any global warming during the past 10 years be getting a little more notice? Isn't it possible that the most apocalyptic voices of global-warming alarmism might not be the only ones worth listening to?

We wonder how long it will be before similar questions find their way into the MSM in New Zealand.

The S-Files

It's What We Need More Of

Contra Celsum has decided to bestow an S-Award upon Jerry Rickman, Waikato Health Board Chairman.

Citation:

Jerry Rickman has announced his resignation as Chairman of the Waikato Health Board. He has cited potential conflicts of interest between his role as chairman and his consultancy work with Price Waterhouse Coopers in Hamilton.

The Board uses the services of the Auckland office of PWC.

Of note here is that Rickman had already disclosed his interests, both to the Minister of Health and to the Board. Both accepted there was no unmanageable conflict. According to a news report, he said he was resigning because he did not want to place the Government or the minister in a position for potential public embarrassment.

No doubt Rickman's firm, PWC, applied some pressure. It has very strict rules for its staff and consultants on issues of conflicts of interest.

We applaud the high standards of integrity on display here. Public service and corporate life would be vastly improved if such standards were routinely followed. If the standard expected was not just actual, but perceived conflicts, resignations would be flying around everywhere.

We also hope that this resignation might reflect a greater consciousness amongst the media and the public generally over issues of conflict of interest. The health sector has had several high profile cases of allegations of conflict of interest in the past year.

The current Prime Minister has eventually removed the appearance of any conflict over his personal investment portfolio by placing it in a "blind" trust. It took time, but he got there. His predecessor never did get there. The former government seemed to specialise in cronyism with all the attendant conflicts that follow.

Jerry Rickman has gone beyond what many would consider was required. But the example is important and the effects will be salutary. We trust that they will spread far beyond the Waikato Health Board.

S-Award, Class I: Jerry Rickman, former Chairman of the Waikato District Health Board, for actions in the course of public duty which have been Smart, Sound, and Salutary.

Meditation on the Text of the Week

The Wisdom of the World And Its Prospects

For it is written, “I will destroy the wisdom of the wise, and the cleverness of the clever I will set aside.” Where is the wise man? Where is the scribe? Where is the debater of this age? Has not God made foolish the wisdom of the world?
I Corinthians 1: 19,20

In our humble opinion, the opening two chapters of the first letter to the Church at Corinth should be written on the forehead of every Christian in the West. This should be so because the “wise” of our age, taking their cue from the post-Christian Enlightenment, have succeeded for a time in reviving the intellectual traditions of the classical world. In these first two chapters of I Corinthians, Paul confronts the vanity and emptiness of those classical traditions—and so, indirectly, confronts the dominant spirit of our age.

If Jerusalem is to avoid the idolatry of our age, on the one hand, and increase its influence and power over it, on the other, it is essential that the truths of this portion of God's Word be deeply inscribed into our hearts and minds. Without it we will simply join with t the wise men, the scribes, and the debaters of this age—we will become like them and subject to them.


The intellectual traditions of the classical world were marked by a deeply rooted rationalism—by which we mean, that the ground of truth, its vindication, and its precepts were understood to be finally dependant upon the mind of man. Human reason was ultimate. It was Man who established the truth. Man was the measure of all things. Man's mind and reasoning gave meaning to the world. Autonomous human reason was sovereign over all things. It was on this common ground of the autonomy of human reason that all the religions and the philosophical schools of the ancient world stood as they debated and argued amongst themselves.

Collectively they represented what Paul calls the “wisdom of the wise, the cleverness of the clever,” and the debates of the debaters.

Paul declares that the Gospel can only proceed to go forward into our culture if it attacks and destroys the fundamental rationalism of our age. Why? Well the answer is obvious: God has declared that such wisdom is not wisdom at all: it must be torn down and destroyed. God has declared the wisdom of this age to be utter foolishness. The bottom line is that Man is not the measure of all things: Man does not give meaning to the world. God alone does. God establishes man, not the reverse.

In this vortex of who establishes whom there is no neutral or middle ground. Note that Paul does not proceed by arguing that in his confrontation with the wise of his age there was a lot they all had in common, and that there was much agreement between them. He was not merely seeking to correct things at the margin. Rather, the entire edifice of Unbelief, of the wisdom of his age, was rotten, awaiting its dissolution. God had declared it all to be utter foolishness. Every thought and intention of man's heart was evil. It had to go.

As long as an individual soul clings to the notion that he will determine and establish whether God is or not, by means of rationalistic tools and techniques, he remains in darkness and sin. His rationalism is his sin. It is the seat of his rebellion against the Living God. What the Unbelieving Mind confirms, verifies, establishes and ratifies, it need not accede to nor submit to. If Man proves, or establishes or confirms or rejects a god with his “wisdom”, it is the god who must bow to Man, not the reverse.

The neo-classical ideology of the West—the “wisdom” of the age—asserts the rational is the real, and what is real is rational. But this is actually a misdirection: what the debater of this age really means to say, if he were more accurate and a little less disingenuous, is “the rationalistic is the real, and the real is what is rationalistic”. This is a very different proposition, and one more tawdry and decrepit in the cool light of day.

Paul goes on to state that Jerusalem is not opposed to reason or wisdom, properly so-called. “We do speak wisdom among those who are mature; a wisdom however, not of this age, nor of the rulers of this age, who are passing away.” (I Corinthians 2: 6) The faculty of reason and the quality of wisdom were created by God: but they only function properly when they are from the outset subject to Him.

Therefore, true faith rests not on men, nor on the wisdom of this age. It can only rest on the power of God and on His Spirit. When men are regenerated by God's Spirit, only then can they sit, clothed, and in their right mind. Only then are they able to receive and believe the proclamation of Christ crucified for their sins. Only then can they start to reason and think properly and truthfully. Only then can they become wise, but not according to the wisdom of this age. In that powerful regenerating work of God's Spirit the roots and tentacles of the wisdom of the wise of this age, and the cleverness of the clever of this age are ripped up and torn out of the human soul. Only then can the idolatry of rationalism be crushed.

So Paul concludes:

Now we have received, not the spirit of the world, but the Spirit who is from God, that we might know the things freely given to us by God, which things we speak, not in worlds taught by human wisdom, but in those taught by the Spirit, interpreting spiritual things to spiritual men. But a natural man does not accept things of the Spirit of God; for they are foolishness to him, and he cannot understand them, because they are spiritually appraised.
I Corinthians 2: 12—14

The wisdom of the world is passing away. It re-emergence in the West in the post-Enlightenment world is a throwback, soon to pass. It is like the final death throes of a smitten dragon. Christ alone is Lord. The rulers of this age are fading.

The Changing Geo-Political Landscape

Crystal Ball, Anyone?

Foretelling--at least of the crystal ball variety--is a reckless business. No-one knows with certainty what the future holds--at least no human being. The best we creatures can do is make educated guesses--but guesses nonetheless.

The present economic crunch is applying the blow torch to global politics in that it is likely to exacerbate and turbocharge some longer term trends which have been percolating away for decades now. For the light relief of our readers, and their mild (possibly raucous) amusement, we thought we would throw out a few thoughts as to what the next few years may see eventuate.

The West has been in decline relative to the rest of the world for nearly thirty years now. The end of the Cold War meant that the binary division of the world into those for us and against us was relaxed; new configurations and alignments have arisen--most of which have involved other nations and regional groups growing in power and influence.

One evidence of this has been the rapid military build up in countries like Indonesia and China. As Huntingdon observed:

Increased military spending and force improvements were the order of the day; China was the pacesetter. Stimulated by both their increased economic wealth and the Chinese build up, other East Asian nations are modernising and expanding their military forces. Japan has continued to improve its highly sophisticated military capability. Taiwan, South Korea, Thailand, Malaysia, Singapore and Indonesia are all spending more on their military and purchasing planes, tanks, and ships from Russia, the United States, Britain, France, Germany and other countries.
Samuel P. Huntingdon, The Clash of Civilisations and the Remaking of World Order (New York: Simon and Schuster, 1996), pp. 89,90.

The world is no longer a Western lake. The economic crisis will likely speed this Western declension. The welfare policies favoured by rights-based western nations, requiring greater and greater government spending to meet entitlements, have been funded by increases in taxes, rising levels of national debt, and easy-credit-consumption led economic growth. Now the credit bubble has burst in the West (and it is predominantly a Western problem--this economic crisis.)

The upshot is that Europe, the UK, and the US cannot afford their entitlement programmes. But even less can they afford the reckless government spending to try to get their citizens ramping up their consumer spending and appetite for still more debt (which they argue is the way to get out of the current economic downturn.) The rise in national indebtedness (and therefore of the dead weight of taxation upon their economies) will weaken them still further over time.

We will likely see a significant quantum shift in economic power and influence away from Western nations to the emerging economies of Asia. The Western economic crisis will make this transfer more quick and palpable.

There are signs that this is happening now. The whole artificial construct of the European Union is under threat. It may not be able to withstand the strain put upon it by the pain of the current economic deleveraging and deflation. Right-based entitlement societies don't usually cope well with hardship. They just make their demands more loud and querulous.

The Herald Tribune recently carried a piece on the current economic crisis threatening the idea of "one Europe."

The leaders of the European Union gathered Sunday in Brussels for an emergency summit meeting designed to tamp down the centrifugal forces unleashed by the global economic crisis that threaten to spin the bloc - and its single currency - apart.

In a statement afterward, the leaders tried to reassure their publics, promising to hold to the single market, promote growth and reject protectionism.

A call from Hungary for a large bailout for newer, eastern members of the union was rejected by Germany, the richest EU nation, and received little support from other countries. . . .

Europe may now be "whole and free" after the collapse of communism. But the European Union is not a country, and the deep global contraction is stimulating nationalism, not consensus.

With uncertain leadership and few powerful collective institutions, the union is struggling with the strains this economic crisis has inevitably produced among 27 different countries with different economic histories. The traditional concept of "solidarity," of one for all, is being undermined by protectionist pressures from political leaders with national constituencies and agendas. . . .

"The European Union will now have to prove whether it is just a fair-weather union or has a real joint political destiny," said Stefan Kornelius, the foreign news editor of Süddeutsche Zeitung in Germany. "The whole project of a joint currency is being tested for the first time. We always said you can't really have a currency union without a political union, and we don't have one. There is no joint fiscal policy, no joint tax policy, no joint policy on which industries to subsidize or not. And none of the leaders is strong enough to pull the others out of the mud." . . .

The construct of a united Europe has always been artificial; it was likely never to endure. (Bernard Connolly, The Rotten Heart of Europe: The Dirty War for Europe's Money. London: Faber and Faber, 1995. While Connolly was writing over ten years ago, this volume is showing up to be prescient in the light of the present internal struggles within the EC.) The present pressures are merely bringing the fault lines and the fissures into sharper focus.

Secondly, we have recently seen Gordon Brown grandiosely calling upon President Obama and the United States to join with Britain and march forward to save the world. Obama for his part recently called upon Brown to join forces to help deliver an international climate change treaty--due to be negotiated in Copenhagen at the end of this year.

Climate change lunacy has generally been ardently propagated in the West. Third world and Asian countries have been happy to go along--provided everybody agree that it is a Western problem and the West must pay. It is the only kind of deal they are interested in. Obama and Brown will have to agree to cap and tax their respective nations into poverty if they are to get a "genuine" international agreement on climate change. We expect that those two will be supine on the issue (while trying to sell it to their own electorates by rhetorical teleprompter flourishes such as "leading the world" and "setting the path forward" and "change we can believe in" etc.)

We expect that the East will negotiate harder than ever in Copenhagen this year for the West to bear the brunt, if not all the cost for so-called global warming. "You caused the problem, you fix it" will be the script. The dependence of Western upon Eastern and Middle Eastern capital to fund their ever burgeoning deficits will lead to capitulation--or at least far less Western stridence. Cap and tax regimes will lead to one of the greatest global wealth transfers we have seen in recent history. And so it gets worse.

Shades of things to come were evident in Hillary Clinton's recent trip to China. Gone was the vexatious hectoring the Chinese over human rights (the Chinese have never bought into western rights-based ideologies). Hillary put her harpish persona in the closet and brought out the sweet, reasonable face. She did not mention human rights. Instead sShe encouraged the Chinese to keep buying up American debt (that is, encouraged them to keep lending money to the US). There we have it in a nutshell. You don't bully people or nations upon whom you depend for economic survival.

Obama will soon find that negotiating international climate treaties with other nations, whilst you are sit on a mountain of national debt which is exploding volcanically under your reckless ideological spending binge, means that you are forced to speak very loudly while you wave nothing more than a limp feather. He will need his teleprompter more than ever. But he will end up being humiliated, along with the nation he leads.

For our part, we are glad that New Zealand is increasingly forging its economic future in Asia and doing do by a growing raft of free trade agreements. We are also glad that whilst our debt is worrying and we certainly have more de-leveraging to go through, we will likely end up less scathed than most.

If only we could get rid of our own rights based entitlement ideologies. In the long run they will kill us just as surely as they are ravaging the US, Europe, and the UK at present.